IAG International Airlines Group is looking to divest assets such as aircraft and stakes in its air freight unit IAG Cargo and frequent flyer programme IAG Loyalty as advisers work on ways to raise cash while global travel remains subdued, sources have told Bloomberg News.
The group is reportedly working with advisers on a strategic review of its portfolio across the group that could lead to partnerships, joint ventures, and stake sales, the insiders claimed. IAG airlines include British Airways, Iberia, Aer Lingus, Vueling Airlines, and LEVEL.
The news came as the group reported on February 25 a EUR2.97 billion euro (USD3.32 billion) net loss for 2021, an improvement on 2020’s EUR4.39 billion (USD4.9 billion) loss.
Although it said it expected passenger capacity to reach 85% of pre-pandemic levels this year, as opposed to 36% in 2021, high oil prices and now the closure of Russian airspace following the invasion of Ukraine, diverting long-haul routes far to the south, have added a veneer of gloom to the airline industry’s prospects for recovery in 2022.
Contemplation about the possible asset disposals are at an early stage and no decisions have been taken, but sales could help strengthen the company’s balance sheet and may result in partnerships with other aviation industry players or investment funds, the sources explained.
IAG responded to ch-aviation’s request for comment by saying: “We don’t have any comment on the Bloomberg story. During our FY results presentation last Friday we said that we analyse all possible scenarios for the business on an ongoing basis to maximise shareholder value.”
IAG Loyalty manages British Airways Executive Club, Iberia Plus, Vueling Club, and Aer Lingus AerClub as well as all of the retail, travel, and financial services partners of the loyalty schemes’ Avios reward currency. Avios has in excess of 36 million users globally.
IAG Cargo operates an air freight network using the freight capacity of its airlines’ passenger flights and maintains three hubs at Dublin International, London Heathrow, and Madrid Barajas airports. Another unit for which the group may be scouting for partners is the IT, procurement, and financial support platform IAG Global Business Services.
IAG is not alone in exploring ways to maximise the value of its assets, with sources telling Bloomberg in early February that United Airlines (UA, Chicago O'Hare) was considering selling a minority stake in its frequent flyer unit MileagePlus.
